After falling more than 1,000 pips in January, CADJPY began consolidating in a 200 pip range between 94.35 and 96.30. After two and a half months of consolidation, the pair managed to find enough buyers to break free from the range top on April 15th.
Since that time CADJPY has enjoyed a 240 pip rally. However that may be about to change as the bulls are about to face their toughest challenge of 2015.
The 99.12 level has acted as support and resistance since 1998. More recently the level became the 2014 open and subsequently provided support for the pair on December 16th of 2014. If that weren’t enough the 50% retracement from the 2014 high to the 2015 low lines up perfectly with 99.12.
All of the above points to the fact that the CADJPY bulls are going to have their hands full over the coming sessions.
Summary: Watch for bearish price action on the daily time frame at 99.12. A bearish setup could trigger a move back to the 96.30 support level. Alternatively, a daily close above 99.12 would expose the 2013 high at 100.85.
